What’s Up, What’s Down: Crude Oil, Heating Oil, and Natural Gas all Sharply Down
Comments for Thursday, July 17
Looking Ahead to Today By Reflecting back at Wednesday’s price action
ENERGIES
Sharply lower closes for crude and heating oil along with the RBOB while lower for natural gas. The crude, heat and the RBOB, although still bullish overall, are forming possible tops helped along by the increase in energy stocks when the call was for a decrease. Natural gas continues to look weak and acts like its bull run is over.
MEATS
Higher closes for lean hogs and pork bellies while lower for live and feeder cattle. Cattle made a new recent low and close looking very weak overall but does have a gap at 10105 basis the August contract that I thought was on the way to being filled after Tuesday’s action but it wasn’t meant to be at least for now. A key area to hold is around 9750. Feeders also look weak but have been holding up better because of lower corn prices(see grain comments) over the last 2 weeks. However the feeders should have rallies against the corn drop in prices leading me to believe the cash price is too high for this market or at least the futures will continue lower overall. The hogs settled sharply higher now in a strong resistance area that could be tough to get through. Still hogs looks pretty strong overall. However, this is a good area to take profits or lighten up but not take any new long positions. There are 2 gaps in the August contract that one must be cognizant of also. Bellies closed lower again still looking very bearish overall.
METALS
Lower closes for silver, copper, platinum and gold. Copper is still in a possible topping formation with support at the 360 area basis the September contract. Platinum continues to look lower closing sharply down again. Gold and silver continue to look higher overall at this time but have room to retrace while consolidating.
SOFTS 07/17
LUMBER: Lumber made a new contract low and close which tells us all we need to know for now.
ORANGE JUICE: Orange juice closed lower now in a strong support area but losing some steam. Still OJ continues to look higher overall at this time.
COCOA: Cocoa closed higher but has little support down to 2800 and is in ‘no mans land’ as far as I’m concerned.
COTTON: Cotton settled higher still in what looks like a bear triangle looking to continue lower overall.
COFFEE: Coffee made a new high since the 7th before selling off and closing lower. There is good support from 14000 down to 13500 basis the September contract. Really no position should be taken either way at this time.
SUGAR: Sugar closed higher but is still in a bull triangle looking strong overall. However, since the formation past the 2/3rds point towards the apex this formation is not reliable as far as trusting it. There is support around the 1300 area and resistance over 1450 basis the October contract.
CURRENCIES
Higher closes for the Japanese Yen, Canadian Dollar and dollar Index while lower for Euro Fx, Swiss Franc, British Pound and Aussie Dollar. The euro and franc are in small bull flags looking higher overall. The yen made a new recent high and close but at the lower end if the trading rang but giving me a buy signal. The Canadian Dollar had a quiet trading day settling slightly higher but looking to continue its upward momentum. The pound and Aussie Dollar closed lower but both looking strong while in a small bull pennants. Conversely, the dollar settled higher but looks very weak while in a bear flag.
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GRAINS
Reports Today- Export Sales: Higher to sharply higher for Minneapolis, Kansas City and Chicago wheat along with soybeans, soymeal, bean oil, and corn while unchanged for rough rice and lower for oats. All of wheat continue to look lower but continue to hold their respective support areas. Corn sold higher this time but still looks weak at this time with little support down to the 650-600 area basis the December contract. Oats settled lower again still forming a possible top with good support under 425 basis the December contract. Rough rice closed unchanged as the ranges are getting narrower and narrower still looking weak overall. Beans, meal and oil had strong closes today with all three still bullish overall but forming possible topping formations.
Rick Alexander has been a broker and analyst in the futures business for over thirty years. He is a Vice-President for Sales and Trading at the Zaner Group (www.zaner.com) a Chicago-based futures brokerage firm. Email Rick at ralexander@zaner.com or call toll-free (888) 281-4158.